)
Executing a quick and smooth succession plan within a fortnight after the death of the company's founder, the board of directors of Dr Reddy's Laboratories Ltd has appointed G V Prasad, who is now vice-chairman and chief executive officer (CEO), as its chairman.
K Anji Reddy, who died on March 16, was chairman. The 52-year-old Prasad, son-in-law of Anji Reddy, would continue as the CEO.
Also, the board has appointed K Satish Reddy, 45, son of Anji Reddy, as vice-chairman in addition to his existing roles as managing director and chief operating officer. The arrangement places Satish Reddy as the second in command in the hierarchy.
Dr Reddy's on Monday said the appointments were based on the recommendations of the nomination, governance and compensation committee. All other terms of and conditions of their appointments, like remuneration and tenure as approved by the shareholders at the annual general meeting (AGM), remain the same.
While the leadership succession bears the trademark low-profile affair the family always maintained, there are many indications that the preparation to this effect was initiated by the founder himself.
Within a week or so after he excused himself from attending the AGM in July last year, Anji Reddy transferred almost the entire stake of 40 per cent in the promoter holding company, Dr Reddy's Holdings Ltd, to a trust floated by the family. The reason given was that the transaction was a part of the private arrangement to streamline succession.
Similarly, Satish Reddy transferred 16.61 per cent of his 29.98 per cent stake, while Prasad transferred 5.43 per cent of his 8.89 per cent stake to the trust.
The promoters together hold a 25.56 per cent stake in Dr Reddy's Lab of which 23.39 per cent is through Dr Reddy's Holdings. Foreign institutions hold 26.17 per cent, while the public, other companies, domestic financial institutions, banks and mutual funds each hold between 6.71 per cent and 7.97 per cent.
Prasad, a graduate in chemical engineering from the Illinois Institute of Technology and a post-graduate in industrial administration from Purdue University, US, was an entrepreneur in his own right. Though he joined the board in 1986, he was appointed vice-chairman and CEO only in 2001, when Cheminor Drugs, where he was managing director, merged with Dr Reddy's.
Prasad played a key role in the evolution of Dr Reddy's Lab from a mid-sized pharmaceutical company to a globally respected pharma major, the company said in its annual report. He is also widely credited as the architect of Dr Reddy's Lab’s successful global generics strategy.
Satish Reddy joined the company in 1993 as executive director and in 1997, was appointed managing director. He currently handles pharmaceutical services and active ingredients and global generics businesses — considered to be the core revenue generating streams. He graduated in chemical engineering from Osmania University, Hyderabad, and holds a masters in medicinal chemistry from Purdue University.
For the nine-month period ended December 2012, the company reported Rs 8,286 crore in revenues.
